Fiscal representation for VAT in the EU: Check out our Representatives

A fiscal representative acts on behalf of another party performing various financial duties.

He can handle tax issues, tax refunds, and helps with other financial tasks. I case you are trying to start your business in an European country a fiscal agent can represent your company in the target country and help with your tax problems and local requirements.

Some countries, such as Czech Republic, even require a fiscal representative for Non-EU companies.

Do I need a fiscal representative?

EU-Companies

Until 2003 all companies trading across the borders of the European Union were required to have a local fiscal representative in every country where they were providing a taxable supply. Since 2006 all EU companies are allowed to register their company directly with the local tax authorities. Although the new requirement makes it much easier for the companies there are still a few borders left, like inaccuracies and misconceptions language wise or just because the country is requiring an appointment with the local tax agent.

Non- EU companies

More than half of the 28 EU member states oblige non-EU companies to appoint a fiscal representative if they are providing taxable services within their state borders.

To avoid pointing out such a representative many non-EU companies choose to build a new company in one EU country to avoid those obligations. Countries like Switzerland and Norway require an appointment with a local fiscal representative for the purpose of VAT or GST for foreign companies to trade within their borders.

Bank Guarantee

The fiscal representative usually holds a full bank guarantee in his favour to protect him from any losses and to act on behalf of his client.

In most countries he is required to ensure that:

  • The foreign company is registered in the local tax office
  • The foreign company is instructed about the local invoicing standards
  • All VAT and associated returns are correctly prepared and submitted
  • Tax inspections are handled in a professional way

Custom clearance and Shipping

One of the main tasks of a fiscal representative concerns the shipping and its custom clearance. They can be distinguished in separate different types:

  • Common custom clearance: Goods will be cleared for “free movement” after they have left the port. This means that the import duties taxes and VAT are paid and the goods can be transported to any place within the European Union.
  • Fiscal clearance: A fiscal clearance can be done for any shipment which doesn’t arrive in the destination country in the first place but is a member of the EU. The trader just has to pay the import taxes in advance, the VAT has to be paid at the local tax office afterwards.
  • T1 transit: shipments to a country which isn’t part of the European Union can be transported under a T1 transit document are uncleared and must be passed to another custom procedure.